Poultry and foodservice deals to September generate £74m

Meat industry acquisitions in the year to 31 August generated £74m, although Boparan Private Office’s acquisition of Bernard Matthews in September will boost the value of 2016 transactions.

Oghma Partners’ 2016 T2 M&A Review of the UK Food and Beverage Sector recorded two major deals this year: BRF Invicta’s purchase of Universal Meats (UK) and Cranswick’s purchase of CCL Holdings. A total of 15 deals across the food industry appear in the review.

Brazilian firm BRF confirmed its acquisition of Universal Meats, based in Sevenoaks, Kent, for $50m (£34m) in February. UK-based Cranswick announced in April its purchase of East Anglia poultry producer CCL Holdings Ltd (Crown) and its wholly owned subsidiary Crown Chicken Ltd for £40m.

Only one significant UK meat industry deal was recorded for 2015, but it was a big one, skewing values for the year: JBS’ acquisition of Moy Park for £945m.

However, 2016 meat industry deals were up on 2014, when the big stories were OSI Group’s 50% stake in the Pickstock Telford abattoir (£13m) and Cranswick’s acquisition of poultry firm Benson Park (£21.5m).

Commenting on the impact of the Brexit vote on future food industry deals, Oghma Partners’ review states: “Although we have seen strong figures for the second tertial of 2016 for deals from foreign investors, as mentioned before, it is likely these deals were already in the pipeline pre-Brexit.

“New transactions may be fewer in abundance as there still remain many unanswered questions as to what exit from the EU actually looks like. This will inevitably have an impact on domestic and foreign investors’ decisions during the medium term in the UK.

“Businesses likely to be particularly affected are those that are part of some pan-European supply chain and where exiting the Customs Union or Single Market might have a negative effect.”

However, the report ultimately concludes positively: “For domestically focused businesses, however, the impact of Brexit is unlikely to be material.

“The UK is still a big market and its consumer base is therefore attractive to foreign investors – arguably assets are ‘cheaper’ as sterling has fallen and, in addition, competitive imports are more expensive – so after the initial aftershock, international firms are still likely to be interested in domestically focused assets.”